How is the Sales Ratio calculated?

The Sales Ratio is calculated by taking the assessed value of a property and dividing it by the sales price of that property. This calculation provides a measure of how the assessed value compares to the actual market transaction price. A higher sales ratio may indicate that properties are being assessed at a value above what they are selling for, while a lower ratio suggests that assessments may be below market prices.

Assessments are typically determined for taxation purposes, and a proper understanding of the sales ratio helps ensure that assessments are fair and in line with the market. It is also crucial for determining property tax rates and ensuring that taxpayers are treated equitably.

This method of calculation is useful for appraisers and assessors alike, as it offers insights into the effectiveness of property assessments compared to actual sales, guiding future adjustments and ensuring that real estate values are accurately reflected for taxation and appraisal purposes.